Apple rides iPods, phones

Wall Street questions Jobs' role

Macintosh and iPod sales helped boost Apple’s fiscal third-quarter earnings 31%, beating Wall Street’s expectations Monday, but investors pummeled the stock after Apple issued soft guidance for the current quarter.

Apple earned $1.07 billion, or $1.19 per share, 11¢ ahead of Wall Street’s expectations. Revenue jumped 38% to $7.46 billion, ahead of analysts’ average view for $7.37 billion in sales.

Apple said it shipped more Macs in the quarter than ever before — 2.5 million, up 41% from a year ago, with desktop shipments growing faster than laptops.

Apple also said iPod sales jumped 12%.

The company shipped 717,000 iPhones, a device launched a year ago that melds smart phone and portable media player features.

CFO Peter Oppenheimer said he’s confident Apple will meet its goal of selling 10 million iPhones this fiscal year, including the cheaper, faster iPhone 3G that reached stores in 22 countries in early July.

Oppenheimer said sales from its retail stores, most of which are in the U.S., rose faster than revenue overall, despite economic turmoil wrought by the domestic mortgage and credit crises.

He also teased forthcoming “state of the art new products that our competitors just aren’t going to be able to match,” but told investors he could not give any details.

“The quarter was a home run,” Oppenheimer said earlier Monday, but at first glance, investors disagreed. Apple’s shares sank $18.04, or 10.8%, to $148.25 in after-hours trading, after gaining $1.34 to close at $166.29.

Apple topper Steve Jobs, who has survived pancreatic cancer, did not join the conference call with investors, prompting an analyst to inquire about his health.

“He has no plan to leave Apple,” said Oppenheimer. “Steve’s health is a private matter.”

Apple doesn’t disclose margins for specific products, but Shaw Wu, an analyst for American Technology Research, said Macs, which sold briskly in the quarter, are among the company’s higher-margin items.

Looking ahead at the fourth quarter and 2009, Oppenheimer forecast even lower margins, tied in part to the launch of undisclosed new products.

Wu said he didn’t know exactly what Apple is planning, but said he expects changes to the Mac laptop lineup.

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